Beyond Lawyers: Legal Literacy for the Future

Abstract

Modern life can be demanding for individuals. To meet these challenges, individuals can require literacy in many areas beyond reading and writing. For example, a growing area of concern has been financial literacy, as individuals face a myriad of decisions that are critical to their financial well-being (ASIC, 2011). However, there have been recent arguments that financial literacy should be expanded to include legal knowledge, especially tax law (Chardon, 2011). This argument is based on the fact that tax law can influence investment returns, deliver welfare payments and be used by governments to drive taxpayer behaviour (such as being a self-funded retiree) (Chardon, 2011). Recent research has demonstrated that Australians’ tax law literacy is lacking in many areas, with certain demographics at risk of lower literacy (Chardon, Freudenberg and Brimble, forthcoming). Research has also raised concerns about the legal literacy of Australian accounting students, especially as it relates to the law about trusts (Freudenberg and Boccabella, 2014). It appears that the current Australian tertiary accounting curriculum does not provide extensive coverage of law relating to trusts, even though trusts are a popular business structure that Australian accountants will need to advise on in their careers. This low legal literacy of accounting graduates is reflected in the additional legal literacy required by tax agents set by the Tax Practitioners Board, which extend beyond the legal education accreditation requirements set by the accounting professional bodies. Similarly, concerns have been raised about accountant’s legal literacy of Self-Managed Superannuation Funds (SMSF) given that SMSFs are largely absent from the Australian tertiary accounting curriculum (Freudenberg and Boccabella, 2016)An understanding of relevant laws and regulation appears to be important as research demonstrates that legal literacy of regulation could be related to compliance behaviour. Recent Australian research found that literacy in terms of SMSF regulation is likely to be significantly higher for those trustees of compliant SMSFs compared to non-compliant ones (Mihaylov, Tretola, Yawson and Zurbruegg, 2015). McKerchar (2002) has argued that greater understanding of tax law could reduce unintentional tax non-compliance.Legal literacy has been argued as an access to justice issue for women (Schuler and Kadirgamar-Rajasingham, 1992) and required to ensure a healthy democracy (Roznai and Mordechay, 2015). Also, the ILAC method (Issue, Law, Application & Conclusion) used in the teaching of law courses provides an important framework to develop students’ information literacy skills, which is critical graduate skill not only for law students but also other business advisors (Freudenberg, 2008). It is argued that legal literacy is an important area for future research, as a basic understanding of legal concepts and requirements can be seen as a critical skill required by individuals, businesses and advisors; and not just lawyers. An outline of some the current research being undertaking as well as proposals for future research will be canvassed.